The force behind Oregon’s massive freeway project works for the governor—and a private company that wants it built.

On Feb. 11, Gov. John Kitzhaber strode into a legislative
hearing and made his strongest pitch yet for the massive highway project
called the Columbia River Crossing.

Hearing Room F in the
State Capitol was jammed, and the meeting before 16 House and Senate
members was thoroughly choreographed. After all, Kitzhaber is gambling
his reputation on the biggest public-works project in Oregon history—a
$3.4 billion freeway bridge and light-rail line across the Columbia
between Portland and Vancouver, something the state’s most powerful
businesses and unions have wanted for years.

During his first term
as governor, Kitzhaber in 1997 said Oregon could not build wider
freeways and spend its way out of the very kind of traffic congestion
backers claim the CRC would solve.

But on this day,
Kitzhaber leaned into the microphone and repeated the support he’s
expressed for the CRC, especially since he ran again for governor in
2010.

“This is a
construction-ready project that will increase mobility and decrease
congestion,” he said. “We have reached a point of opportunity and of
significant urgency.”

Two years ago,
Kitzhaber couldn’t even get lawmakers to vote on a symbolic resolution
to express support for the CRC. This time, it was a done deal: The
committee approved a $450 million measure to make Oregon’s down payment.
The House passed the measure 45-11 on Feb. 25, and the bill could go to
the Senate this week.

The difference
between failure and success was a slight woman dressed in black who
watched the governor from the back of the room, leaning forward, her
chin resting on her fist.

Patricia McCaig has
been a political insider for decades, pulling off coups and building a
reputation as someone with the strategic smarts to turn around troubled
campaigns. She did it in 1990 for Barbara Roberts’ campaign for
governor, for Kitzhaber in his 2010 victory, and now for the CRC.

“Five years ago, the
idea that Oregon would be the likeliest state to first appropriate its
share of the local match was almost laughable,” says Bill Wyatt,
director of the heavily pro-CRC Port of Portland. “Patricia’s engagement
has been the difference.”

Her flinty and
aggressive style makes her an effective advocate and intimidating foe.
“Patricia McCaig is not an ingratiating type,” says longtime Oregon
pollster Tim Hibbitts, who briefly worked as McCaig’s business partner.
“If I were working a major political campaign in Oregon, I would
absolutely want Patricia on my campaign. Period.”

Kitzhaber has made
McCaig, 58, his top adviser on the CRC, a position in which she has
waged a years-long political battle to make sure 2013 is the project’s
year.

But
she is not a state employee. McCaig’s paycheck is signed by the CRC’s
biggest contractor, David Evans and Associates, which profits by the
project going forward. To date, McCaig has been paid $417,000.

Government ethics experts from across the country interviewed by WW say Kitzhaber’s use of McCaig appears to be a conflict of interest and demonstrates a lack of transparency.

McCaig’s billings
show she has worked more than 800 hours since mid-2011 trying to
convince Oregon lawmakers to approve the CRC. But records show she has
never registered as a lobbyist with the Oregon Government Ethics
Commission, which could be a violation of state ethics laws (see
below).

The long journey of
the CRC—and McCaig’s role promoting it—is a telling story of the way in
which a huge, deeply flawed project can still move forward via power
politics and a whole lot of spin.

Kitzhaber declined to be interviewed for this story. He canceled an interview scheduled with WW two weeks ago, citing a conflict in his calendar, and has not rescheduled.

McCaig declined repeated requests to be interviewed for this story.

“My job is strategic communications,” McCaig told WW, “and this isn’t part of those strategic communications to get the bridge built.”

In the years following TriMet’s opening of the MAX
light-rail system in 1986, Oregon planners have dreamed about running a
train line across the Columbia River. But in 1995, Vancouver voters
rejected a plan to extend Portland light rail into their city. For the
next few years, officials from the two states discussed how Oregon could
convince its northern neighbors to accept a MAX train.

In
2002, with Kitzhaber backing the idea, Washington and Oregon sketched
out a plan for a new bridge with light rail. In March 2004, two familiar
faces showed up in the office of then-Gov. Ted Kulongoski.

One
was former Oregon Gov. Neil Goldschmidt, who was working for two major
contractors, Bechtel Corporation and Parsons Brinckerhoff. His partner
was Tom Imeson, a longtime political insider who had been Goldschmidt’s
chief of staff in the governor’s office. Imeson led Kulongoski’s
transition team, as he has also done twice for Kitzhaber.

Goldschmidt and
Imeson urged Kulongoski to put the CRC at the top of his transportation
agenda. The state Department of Transportation started planning. Over
the next five years, the planned bridge got bigger and wider.

But by 2009, the CRC
was in trouble. Local governments agreed to a plan, but bickered over
the number of lanes on the bridge. Vancouver’s mayoral race was won by a
candidate who opposed tolling—a major part of the finance plan. And
criticism over the lack of money for the CRC grew louder and more
credible by the day.

Goldschmidt by then
had been tarnished by scandal with his admission he had repeatedly raped
a teenage girl while Portland mayor. His lobbying partner, Imeson,
landed at the Port of Portland.

Sources
in the Kulongoski administration say Imeson and Wyatt, the port’s
executive director, insisted the CRC get new leadership. The name they
put forward was Patricia McCaig. (Imeson confirmed this account. Wyatt,
when first asked, said he couldn’t remember what role he played, but
later said Kulongoski chose McCaig without his involvement.)

“She has been
involved in the public life of Oregon at the highest levels for over 30
years, so she brings quite a Rolodex and set of experiences to a job
like this,” Wyatt tells WW. “That’s what she brings, a rare and unique combination of experience and contacts.”

BRIDGE TENDER: Patricia McCaig’s tireless work pushing the $3.4 billion Columbia River Crossing forward—despite serious project challenges—resulted in a successful Oregon House vote to commit $450 million for the project. The Senate is expected to vote soon.

Like Imeson and Wyatt, McCaig is part of a “chief-of-staff
club,” having served that role for Gov. Barbara Roberts from 1991
through 1994.

McCaig
was working as a secretary in a state agency when Sen. Frank Roberts
(D-Portland) hired her in 1979 to help in his legislative office. McCaig
was then 26, a University of Washington dropout from Indianapolis,
where her father worked as an executive for Shell Oil.

The professorial
Roberts soon made McCaig part of his family, including her in weekly
Sunday brunches and holiday dinners. “She’s like my adopted daughter,”
Roberts told The Oregonian in a 1991 profile of McCaig.

McCaig proved to be a
keen political strategist and soon was helping Roberts’ wife, Rep.
Barbara Roberts, win election as secretary of state in 1984. Six years
later, McCaig staged an upset victory when Barbara Roberts beat
Republican Dave Frohnmayer, the establishment’s choice for governor.

How McCaig did it is
telling. Roberts trailed Frohnmayer by 15 to 20 points in the polls when
McCaig poured all of the campaign’s cash into TV ads. It was August—a
time when no one was paying attention to the race; Frohnmayer’s campaign
chortled about her terrible misstep.

But McCaig had inside information: She knew The Oregonian
was in the field with a poll that would come out right after Labor Day.
The Roberts ads—showing a cheery, sunny candidate—aired just as
pollsters were asking voters their opinions of the candidates.

McCaig’s
strategy worked: The poll showed Roberts trailed by only 7 points, and
it damaged perceptions of Frohnmayer’s invincibility. Roberts went on to
beat him.

“There were not many
people who thought she had a chance to win,” Hibbitts says. “I was one
of them. But they put all their money into early television buys, got
the momentum and never gave it up.”

McCaig’s gruff and
charge-forward demeanor contrasted with her boss’s friendly, upbeat
style. But a growing power imbalance between the two was obvious enough
for political insiders to start asking questions. Six months after
Roberts took office, an Oregonian headline asked, “Is Patricia McCaig the real governor of Oregon?”

McCaig orchestrated
Roberts’ failed efforts to pass a sales tax, including a calamitous 1992
special session in which McCaig misjudged Republican leaders and left
her boss embarrassed and appearing weak.

The next year,
Kitzhaber—who had served as Senate president—walked into Roberts’ office
and announced he would challenge her in the 1994 primary. He turned and
walked out, with Roberts chasing him down the hall, pleading with him
to stop. He didn’t.

Frank Roberts died of
cancer in October 1993, and Barbara Roberts lacked the will to mount a
re-election campaign Kitzhaber could very well win.

McCaig and Roberts’
relationship broke apart after that, bitterly. The former governor
declines to talk about McCaig. But in her 2011 memoir, Up the Capitol Steps: A Woman’s March to the Governorship,
Roberts hints at McCaig’s misunderstanding of who was really governor.
McCaig, Roberts wrote, told the press the 1992 sales-tax fiasco was “the
biggest public humiliation of my life.”

“Funny, but I thought
the failure and loss were mine,” Roberts wrote. “There seemed in that
statement a confusion of roles and perhaps even power.”

McCaig also emerged from those years with a hatred for
Kitzhaber. She witnessed what she saw then as Kitzhaber’s callous
treatment of Roberts, and told friends and associates of her loathing
for him.

The
two began their rapprochement in 2000, when Kitzhaber asked McCaig to
help defeat several of anti-tax activist Bill Sizemore’s ballot
measures. The next year, Kitzhaber appointed her to the state Board of
Higher Education.

McCaig
had been running communications for David Evans and the CRC for eight
months when Kitzhaber needed her to resuscitate his 2010 comeback
campaign against Republican Chris Dudley, a former Portland Trail
Blazers player who was outraising Kitzhaber by a 2-to-1 margin.

McCaig became
Kitzhaber’s campaign director. At that point, Kitzhaber’s campaign had
been stumped as to how it should take on Dudley. “The only thing
negative we had about him,” says Kitzhaber campaign staffer Kevin
Looper, “was his free-throw record.”

McCaig immediately
targeted Dudley’s lack of experience and knowledge about how government
worked, compared to Kitzhaber’s long record—he’d served 24 years as a
state legislator and two previous terms as governor.

She was also the
conduit between Kitzhaber and the campaign staff, concentrating
information and her influence. “She was the epicenter,” Looper says.
“That campaign wouldn’t have been able to tie its shoes without Patricia
there to put her finger down on the laces.”

Kitzhaber beat Dudley
in one of the closest campaigns for governor in decades, winning by
only 22,238 votes out of 1.45 million cast. And those close to Kitzhaber
knew he could not have won his historic third term as governor without
McCaig.

Elected officials who have spoken to Kitzhaber say that while he publicly endorses the CRC, in private he dislikes it.

BRIDGING A PARADOX: On Feb. 11, Kitzhaber urged a special joint Oregon Legislative committee to sign off on $450 million plans for the Columbia River Crossing. Even though privately he’s confided he’s not a fan of the elaborate freeway, bridge and light-rail project, publicly he’s championed a fix since 2002.

But business and the
trade unions wanted the CRC, and Kitzhaber embraced it during his 2010
campaign. Not long after he was elected, he appointed McCaig to be “lead
adviser” on the CRC.

Critics had been
scoring points by arguing the CRC was based on inaccurate, high traffic
counts. With $110 million spent at that point on planning, a panel of
experts in 2011 found the CRC was pursuing a risky bridge design. Oregon
officials couldn’t get legislators to support a symbolic measure on the
CRC, and a bipartisan group of 20 legislators had also signed a letter
saying cost estimates and tolling projections were iffy at best.

“Before Patricia got involved in the project, the Oregon side was in deep, deep trouble,” Wyatt says. “We had no momentum.”

McCaig organized what amounted to a new political campaign for Kitzhaber that plunged him in as a full partner in the CRC.

In April 2011, he
appeared at a kickoff press conference for a new bridge design with
Washington Gov. Christine Gregoire—an event far bigger than Kitzhaber
held when he launched his 2010 campaign for governor.

Part of the strategy
was to portray Kitzhaber and Gregoire as appearing to cut costs by
selecting the least-expensive bridge design.

“A lot of the
agreements and commitments and arrangements that were put in as part of
the package that I inherited when I was elected, I wasn’t a party to,”
Kitzhaber told the crowd of politicians, labor and business
representatives. “But I want to stand with Gov. Gregoire and lend my
support to this project and this decision.”

McCaig came up with a
strategic blueprint that looked ahead to the 2013 Legislature. To get
there, she and CRC officials began to work on resistant lawmakers.

One of them was Rep. Cliff Bentz (R-Ontario), who in 2009 wrote an op-ed article in The Oregonian with Reps. Jules Bailey (D-Portland) and Brian Clem (D-Salem) questioning the CRC’s proposed cost and lack of open debate.

In 2011, Bentz was named co-chairman of a special oversight committee. He’s now a co-sponsor of the CRC funding bill.

Bentz says he became
convinced the CRC was something the state, and particularly the Port of
Portland, needed. And he says McCaig was the key source of those
answers. “She goes and gets the facts and brings them to you,” Bentz
says.

Meanwhile, CRC
opponents found they were overwhelmed by McCaig’s volleys. “Patricia is
getting people into rooms to lobby legislators,” says Evan Manvel, then a
lobbyist for the Coalition for a Livable Future. “Every time we meet
with them, we know Patricia’s got 15 lobbyists meeting with them.”

“She’s checking her bases, making sure all her people are covered,” Wiener says. “She is relentless about that.”

McCaig has taken bad, even damning news and spun it into public-relations gold.

One of the CRC
critics’ most persuasive arguments is that the bridge won’t pay for
itself: The traffic estimates are way off, and tolls from the CRC won’t
carry their share of the costs. As part of McCaig’s strategy, Kitzhaber
asked Oregon Treasurer Ted Wheeler to perform an independent review of
the financing plans.

In July 2011, Wheeler issued a report that blew a $600 million hole in the CRC’s toll financing plan.

McCaig used the report to pitch legislators a bargain-basement bridge.

“We’ve clearly been
directed by the governor, the public and conversations with you to go
for a smaller project,” McCaig testified before lawmakers in early 2012.
“That’s the reality of these times.”

She called for
phasing in the bridge and trimming around the edges. Kitzhaber got
credit for the newer, sleeker Columbia River Crossing.

But in reality, the CRC is no less expensive.

The initial phase is
now $2.8 billion. But the overall long-term cost of $3.4 billion hasn’t
changed. And CRC officials say doing the work later will make it cost
more.

McCaig has also shown skill in deflecting the CRC’s accountability with one big misstep: The bridge had been designed too low.

After all the
planning (costs have now hit $165 million), the bridge was designed at
95 feet—not high enough for major ship traffic.

When
that news broke in March 2012, McCaig and CRC officials blamed the U.S.
Coast Guard, which must approve the bridge’s clearance, for not warning
them sooner. “It was kind of a surprise to many people, including the
governor,” McCaig testified before legislators in September 2012.

Except that it
wasn’t. Coast Guard officials say the CRC knew the bridge was being
designed without enough clearance. McCaig’s own invoices show that on
Nov. 1, 2011, more than four months before the news broke, she spent 2½
hours advising “CRC leadership on emerging Coast Guard permitting
issues.”

CRC planners have
since bumped the height to 116 feet—which is still too low for some
commercial traffic—and have dared the Coast Guard to reject it.

The CRC’s financing and toll-revenue plans are still
shaky, traffic figures are far below projections, and political
opposition is growing stronger in Clark County and Washington state by
the day.

Despite this,
McCaig’s efforts have led to a bill that nods to many of those concerns.
Legislators from both parties say they face growing pressure to vote
for the measure, though they decline to talk on the record about it.

But what they
describe is similar to the hard sell McCaig recently gave Bob Stacey,
the newly elected Metro councilor and CRC foe.

Stacey says McCaig
met with him Jan. 22 to convince him to change his mind about the CRC.
(Metro has already given its OK to the project.)

“She
wanted me to come over and start working and supporting the project as
an elected official,” Stacey says. “She said it’s time for me to start
helping rather than hindering.”

Stacey says he told her the CRC is wasteful, poorly designed and damaging, and that he would do his best to bring it to a halt.

“She said that was an
arrogant conclusion that showed obvious disrespect for people who had
worked so hard on the project,” Stacey says.

Nonetheless, Stacey says he knows McCaig has a winning technique. “I
wish she were somebody those of us who have concerns about the cost and
harm of this project could go to to help us deliver those messages,”
Stacey says. “But that’s not the side she’s working on.”

Power Interchange

Patricia McCaig occupies one of the most
unusual positions in power in Oregon political history: carrying the
title of aide to the governor while being paid $417,000since 2009 by a major consultant on the state’s biggest public-works project ever.

Her role has left
legislators and political insiders wondering to whom McCaig answers, and
if her relationship to Gov. John Kitzhaber and the contractor is
sufficiently transparent.

Experts on government ethics tell WW the arrangement is troubling.

“I’ve never seen
anything like this before, and I’ve been doing this for 40 years,” says
Bob Stern, the retired former general counsel for the California Fair
Political Practices Commission, who helped write
California’s conflict-of-interest laws. “You can’t have two masters; you
usually owe your allegiance to the one who pays you even if you think
you believe your allegiance is to the government.”

David
Evans and Associates, based in Portland, is the CRC’s lead contractor
for planning the project. The company has billed for more than $30
million of the $165 million spent on the project to date.

The company’s executives distance themselves from McCaig.

“She’s not on our
payroll,” says Ron Gasper, the company’s chief financial officer. “She’s
not a subconsultant to us, she’s a consultant to the project.”

But documents obtained by WW show David Evans and Associates signed her company, McCaig Communications, to a contract in September 2009 at $90 an hour.

Kitzhaber
spokesman Tim Rafael says David Evans is the administrator of the CRC
and pays everyone related to the project. He says McCaig reports
directly to Oregon Department of Transportation Director Matt Garrett.

“There
is only one project and one master and that is getting the I-5 bridge
replacement project done,” Rafael says. “We have been nothing but
transparent.”

Judy Nadler, a senior
fellow at the Markkula Center for Applied Ethics at Santa Clara
(Calif.) University, says the lack of transparency the arrangement
creates is unsettling. “It certainly looks like the
inner circle is driving this, where it’s actually a massive public-works
project that would be paid for by the taxpayers,” Nadler says.

The
arrangement leaves “a bad taste in the mouth,” says Lisa Gilbert of
Public Citizen, a Washington D.C.-based government watch group. “Perhaps
taxpayer dollars shouldn’t go to someone who can benefit on the back
end.”

But Alan Rosenthal, a
longtime professor of public policy and political science at Rutgers
University in New Jersey, says he doesn’t see the problem with McCaig’s
dual roles.

“Governors
should be able to seek advice from whoever they want,” he says. “The
fact that she has no official position means there’s no conflict between
her job as adviser to the governor and her working as subcontractor.
Particularly if the governor isn’t trying to hide anything.”

“If it’s bad advice and a bad project,” Rosenthal says, “Gov. Kitzhaber will have a political price to pay.”

Former chief of staff to Gov. Barbara
Roberts. Married to Tom Walsh, longtime friend of Goldschmidt. Named CRC
consultant in 2009; later, as Kitzhaber’s campaign director, credited
with Kitzhaber’s narrow 2010 victory. Appointed by Kitzhaber as senior
adviser to the governor on the CRC while paid by the project’s biggest
contractor, David Evans and Associates.

Gov. John Kitzhaber

Threatened to challenge Roberts in 1994.
Proposed a more modest CRC idea while governor in 2002. Opposed big
freeway projects but endorsed a bigger CRC while seeking election to
third term as governor. Hired McCaig as 2010 campaign director; then
promoted her to his top CRC adviser after she led his campaign to
victory.

Bill Wyatt

Port of Portland executive director,
former Kitzhaber chief of staff. Pushed Kulongoski to put McCaig in
charge of CRC and recommended she take over Kitzhaber’s 2010 campaign.

Former Gov. Neil Goldschmidt

Lobbied Kulongoski early on theCRC, paid by contractor Parsons Brinkerhoff. Dropped consulting business after admitting raping a 13-year-old girl.

Former Gov. Ted Kulongoski

Served between Kitzhaber administrations.
A lackluster CRC supporter, he was pressed by Wyatt and Imeson to
install McCaig as leader of CRC effort. His adminstration arranged for
McCaig to be paid by contractor David Evans and Associates.

Tom Imeson

Port of Portland public affairs director. Former
chief of staff and consulting partner with Goldschmidt. Has overseen
transition teams for Govs. Kitzhaber and Kulongoski. Pushed
hiring of McCaig for the CRC and later Kitzhaber’s 2010 campaign.

Swaying the Bridge

Gov. John Kitzhaber’s top aide on the Columbia River
Crossing has spent hundreds of hours in the past two years working to
convince Oregon legislators to back the $3.4 billion project.

But
Patricia McCaig has never done what state law requires of those who get
paid to persuade legislators: register as a lobbyist.

The
law requires anyone who “influences or attempts to influence legislative
action” more than 24 hours in a three-month period to register as a
lobbyist with the Oregon Government Ethics Commission. A violation of state ethics laws can bringa $5,000 fine.

“Just supplying information to folks may not be lobbying,” Ron Bersin, the ethics commission director, tells WW.
“If someone is attempting to influence that legislation, trying to get
it passed or trying to sway them, it starts breaking into the lobbying
definition.”

McCaig has said her
primary job is to get the CRC approved. Part of making the CRC happen is
persuading legislators to fund it. Since 2011, she’s testified before
lawmakers on behalf of Kitzhaber and the CRC project.

WW
obtained McCaig’s billings through a public-records request to the CRC,
which is funded jointly by Oregon and Washington. In the last quarter
of 2012, she reports spending as many as 219 hours on legislative
issues—far beyond the 24-hour limit.

The work, she
reported, included meeting with legislators, answering their questions
and preparing strategies to get lawmakers to approve the project.

Thirty-two members of
Kitzhaber’s office are registered as lobbyists. So is Oregon Department
of Transportation Director Matt Garrett.

In an email to WW,
McCaig acknowledges not registering as a lobbyist. She claims the
current CRC effort didn’t begin until Nov. 30, 2012, when Kitzhaber
released his proposed budget.

“There was no pending
legislative action in Oregon regarding the project,” McCaig writes.
“However, legislative committees or individual legislators would ask the
project for educational materials or presentations. Only recently, in
February, was legislation introduced.”

Bersin says the law doesn’t make the distinction McCaig is trying to create.

“If you’re asking me
does there have to be a bill present in order for lobbying to be
present,” Bersin says, “the answer is no.” –Andrea Damewood and Matt Kaufmann

Hours of InfluencePatricia McCaig, adviser to Gov. John Kitzhaber and a CRC consultant, reports spending hundreds of hours working on getting legislators to approve the project (blue columns). State ethics laws require anyone who spends more than 24 hours in a quarter trying to influence legislators must register as a lobbyist (red line).

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